FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark  One)
[ X ]     QUARTERLY  REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE     ACT  OF  1934

                       For the quarter ended June 30, 2004

                                       OR

[   ]     TRANSITION  REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE     ACT  OF  1934

             For the transition period from __________ to __________


                 Commission File Number                1-12727
                                                      ----------


                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)


       Delaware                                        96-11-3349733
     ----------                                        -------------
 (State  or  other  jurisdiction  of             (I.R.S. Employer Identification
   incorporation  or organization)                             No.)





                1881  Lakeland  Avenue,  Ronkonkoma,  NY   11779
             -------------------------------------------------------
  (Address  of  principal  executive  offices)              (Zip Code)

                                 631-739-2000
                                 ------------
              (Registrant's telephone number, including area code)


    (Former name, former address and former fiscal year, if changed since last
                                     report)


Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding 12 months (or for such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.

Yes     X          No
        -


As  of  August  16,  2004,  there  were  115,753,362  shares  of  Common  Stock
outstanding.






























































<PAGE>




                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
                                      INDEX
                                      -----




                                                               Page  No.
                                                               ---------

PART  I.   FINANCIAL  INFORMATION
---------------------------------

Item  1.     Financial  Statements  (Unaudited)

     Consolidated  Balance  Sheets  --
     June  30,  2004  and  December  31,  2003                    3

     Condensed  Consolidated  Statements  of  Operations  --
     Three  Months  Ended  June  30,  2004  and  2003
     And  Six  Months  Ended  June  30,  2004  and  2003          4

     Condensed  Consolidated  Statements  of  Cash  Flows  --
     Six  Months  Ended  June  30,  2004  and  2003               5

     Notes  to  Condensed  Consolidated  Financial
     Statements  -  June  30,  2004                            6  -  10


Item  2.     Management's  Discussion  and  Analysis  of
     Financial  Condition  and  Results  of  Operations       10  -  15

Item  3.     Controls  and  Procedures                           15



PART  II.   OTHER  INFORMATION
------------------------------

Item  1.     Legal  Proceedings                               15  -  16

Item  5.     Other  Information                                   16

Item  6.     Exhibits  and  Reports  on  Form  8-K                16


Signatures                                                        17






























<PAGE>






PART  I.   FINANCIAL  INFORMATION
---------------------------------

Item  1.     Financial  Statements  (Unaudited)

SENTRY  TECHNOLOGY  CORPORATION
CONSOLIDATED  BALANCE  SHEETS
(In  thousands)

<TABLE>
<CAPTION>
<S>                                                     <C>         <C>
                                                        June 30,    December 31,
                                                             2004            2003
                                                        ----------  --------------

ASSETS
------------------------------------------------------
CURRENT ASSETS
  Cash and cash equivalents. . . . . . . . . . . . . .  $   1,339   $         210
  Accounts receivable, less allowance for doubtful
     accounts of $407 and $304, respectively . . . . .      3,519           1,482
  Inventories. . . . . . . . . . . . . . . . . . . . .      3,170           1,855
  Prepaid expenses and other current assets. . . . . .      1,039             126
                                                        ----------  --------------
    Total current assets . . . . . . . . . . . . . . .      9,067           3,673

PROPERTY, PLANT AND EQUIPMENT, net . . . . . . . . . .        613             209
GOODWILL                                                    1,588             ---
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . .        413             211
                                                        ----------  --------------

                                                        $  11,681   $       4,093
                                                        ==========  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------------------------
CURRENT LIABILITIES
  Revolving line of credit and term loan . . . . . . .  $   2,831   $       1,515
  Accounts payable . . . . . . . . . . . . . . . . . .        988             566
  Accrued liabilities. . . . . . . . . . . . . . . . .      1,285           1,601
  Obligations under capital leases - current portion .          5               5
  Deferred income. . . . . . . . . . . . . . . . . . .        185             271
                                                        ----------  --------------
    Total current liabilities. . . . . . . . . . . . .      5,294           3,958

NOTES PAYABLE. . . . . . . . . . . . . . . . . . . . .        276             247
OBLIGATIONS UNDER CAPITAL LEASES -
  non-current portion. . . . . . . . . . . . . . . . .         10              13
CONVERTIBLE DEBENTURES                                      1,842             ---
MINORITY INTEREST                                             890             ---
                                                        ----------  --------------
    Total liabilities. . . . . . . . . . . . . . . . .      8,312           4,218

SHAREHOLDERS' EQUITY
  Common stock . . . . . . . . . . . . . . . . . . . .        116              86
  Additional paid-in capital . . . . . . . . . . . . .     48,144          44,658
  Accumulated deficit. . . . . . . . . . . . . . . . .    (44,929)        (44,749)
  Note receivable from shareholder                            ---            (120)
  Equity adjustment from foreign currency translation          38             ---
                                                        ----------  --------------
    Total shareholders' equity (deficit) . . . . . . .      3,369            (125)
                                                        ----------  --------------
                                                        $  11,681   $       4,093
                                                        ==========  ==============
</TABLE>





See  notes  to  the  condensed  consolidated  financial  statements.





<PAGE>






SENTRY  TECHNOLOGY  CORPORATION
CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(In  thousands,  except  per  share  data)


<TABLE>
<CAPTION>

<S>                                                             <C>
                                                                Three Months Ended                    Six Months Ended
                                                                      June 30,                             June 30,
                                                                ----------------------------------------------------------
                                                                2004             2003                 2004         2003
                                                                ----------------------------------------------------------
<S>                                                             <C>              <C>                 <C>        <C>

REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  4,241         2,326               $  7,187   $ 5,900

COSTS AND EXPENSES:
  Cost of sales. . . . . . . . . . . . . . . . . . . . . . . .     1,682           837                  2,623     2,489
  Customer service expenses. . . . . . . . . . . . . . . . . .     1,105           697                  2,120     1,818
  Selling, general and administrative expenses . . . . . . . .     1,154           805                  2,051     1,750
  Research and development . . . . . . . . . . . . . . . . . .       180           175                    340       335
                                                                --------      --------               --------   --------

                                                                   4,121         2,514                  7,134     6,392
                                                                ---------     --------               --------   --------

OPERATING INCOME (LOSS). . . . . . . . . . . . . . . . . . . .       120          (188)                    53      (492)

INTEREST AND FINANCING EXPENSES. . . . . . . . . . . . . . . .        79           152                    204       342
                                                                ---------     --------               --------   --------

INCOME (LOSS) BEFORE INCOME TAXES. . . . . . . . . . . . . . .        41          (340)                  (151)     (834)

INCOME TAX EXPENSE (BENEFIT) . . . . . . . . . . . . . . . . .        15          (348)                    15      (348)
                                                                ---------     --------               --------   --------

INCOME (LOSS) BEFORE MINORITY INTEREST
     AND EXTRAORDINARY ITEM. . . . . . . . . . . . . . . . . .        26             8                   (166)     (486)

MINORITY INTEREST                                                    (14)          ---                    (14)      ---
                                                                ---------     --------               --------   --------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM. . . . . . . . . . . .        12             8                   (180)     (486)

EXTRAORDINARY ITEM - Gain on extinguishment
  of debt, net of $348 income taxes                                  ---           522                    ---       522
                                                                ---------     --------               --------   --------

NET INCOME (LOSS). . . . . . . . . . . . . . . . . . . . . . .  $     12           530               $   (180)  $    36
                                                                =========     ========               ========   ========

NET INCOME (LOSS) PER SHARE
Income (loss) before extraordinary item. . . . . . . . . . . .  $   0.00          0.00               $  (0.00)  $ (0.01)
Extraordinary item . . . . . . . . . . . . . . . . . . . . . .      0.00          0.01                   0.00      0.01
                                                                ---------     --------               --------   --------
  Basic and diluted. . . . . . . . . . . . . . . . . . . . . .  $   0.00          0.01               $  (0.00)  $  0.00
                                                                =========     ========               ========   ========

WEIGHTED AVERAGE SHARES
  Basic and diluted. . . . . . . . . . . . . . . . . . . . . .   105,862        82,943                 95,809    82,601
                                                                =========     ========               ========   ========


See notes to the condensed consolidated financial statements.
</TABLE>







<PAGE>















SENTRY  TECHNOLOGY  CORPORATION
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
(In  thousands)

<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                              June 30,
                                                                         ------------------
<S>                                                                      <C>          <C>
                                                                               2004    2003
                                                                         -----------  ------


CASH FLOWS FROM OPERATING ACTIVITIES:
----------------------------------------------------------------
  Net income (loss). . . . . . . . . . . . . . . . . . . . . . .         $     (180)  $  36
  Adjustments to reconcile net income (loss)
     to net cash (used in) provided by operating activities:
     Depreciation and amortization . . . . . . . . . . . . . . .                 89     200
     Provision for bad debts . . . . . . . . . . . . . . . . . .                 20      25
     Non-cash consideration                                                      53     ---
     Minority interest in net income of consolidated subsidiary                  14     ---
     Extraordinary gain on extinguishment of debt                               ---    (870)
  Changes in operating assets and liabilities:
     Accounts receivable . . . . . . . . . . . . . . . . . . . .               (524)    513
     Inventories . . . . . . . . . . . . . . . . . . . . . . . .                (31)    940
     Accounts payable and other current assets and liabilities .               (515)   (162)
                                                                         ----------  ------

    Net cash (used in) provided by operating activities. . . . .             (1,074)    682
                                                                         -----------  ------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment, net . . . . . . . .                 (9)    (12)
  Intangibles. . . . . . . . . . . . . . . . . . . . . . . . . .               (185)    (12)
  Net cash provided by the acquisition of ID Systems                             82     ---
                                                                         -----------  ------

    Net cash used in investing activities. . . . . . . . . . . .               (112)    (24)
                                                                         -----------  ------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings (payments) under the revolving line
     of credit and term loan . . . . . . . . . . . . . . . . . .                318    (770)
  Proceeds from bridge loan                                                     100     ---
  Repayment of bridge loan                                                     (100)    ---
  Proceeds from convertible debentures and warrants                           2,000     ---
  Repayment of obligations under capital leases. . . . . . . . .                 (3)    (52)
  Proceeds from sale of stock, net                                              ---       5
                                                                         -----------  ------

    Net cash provided by (used in) financing activities. . . . .              2,315    (817)
                                                                         -----------  ------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . .              1,129    (159)

CASH AND CASH EQUIVALENTS, at beginning of period. . . . . . . .                210     266
                                                                         -----------  ------
CASH AND CASH EQUIVALENTS, at end of period. . . . . . . . . . .         $    1,339   $ 107
                                                                         ===========  ======


See notes to the condensed consolidated financial statements.
</TABLE>




<PAGE>













SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
JUNE  30,  2004


NOTE  A  --  Basis  of  Presentation
------------------------------------
The  consolidated  financial  statements  include the accounts of Sentry and its
majority-owned  subsidiaries.  All  intercompany  accounts and transactions have
been  eliminated  in  consolidation.

The accompanying unaudited condensed consolidated financial statements have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of  America  for  interim  financial  information  and  with the
instructions  to  Form  10-QSB.  Accordingly,  they  do  not  include all of the
information  and  footnotes required by accounting principles generally accepted
in  the  United  States  of  America  for  complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered  necessary  for  a  fair  presentation  have  been included.  Interim
results are not necessarily indicative of the results that may be expected for a
full  year.  These  financial  statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in Sentry's
Annual  Report to Stockholders on Form 10-KSB for the fiscal year ended December
31,  2003,  as  filed  with  the  Securities  and  Exchange  Commission.

Certain prior period amounts have been reclassified to conform to current period
presentation.


NOTE  B  --  Capital  Transactions  and  ID  Systems  Acquisition
-----------------------------------------------------------------
Over  the  last  several years, our largest shareholder, Dialoc ID Holdings B.V.
("Dialoc")  was  not able to provide us with additional financial support.
On  April  19,  2004,  Dialoc sold 39,066,927 Sentry common shares (representing
approximately  46%  of  the  total issued and outstanding shares of Sentry) to a
group of investors.  Of the group, Saburah Investments Inc. ("Saburah") acquired
22,758,155  shares,  Mr.  Robert  Furst 14,554,386 shares and Dr. Morton Roseman
1,754,386  shares.  Mr. Peter Murdoch, President, CEO and Director of Sentry, is
the  owner  of  Saburah.  Mr.  Furst  is also a long-standing member of Sentry's
Board of Directors.  As a result of this transaction, Messers Angel and de Nood,
Principals  of  Dialoc,  resigned  from  Sentry's  Board  of  Directors.

In  addition  to  the  purchase of Sentry's common shares, Saburah also acquired
100% of ID Security Systems Canada, Inc. and ID Systems USA Inc. ("ID Systems").
The price paid to Dialoc by Saburah and Murdoch for Sentry and ID Systems shares
in  cash,  debt assumption and other consideration is approximately $3.6 million
plus the surrender of Murdoch's 15% interest in Dialoc.  Saburah has also agreed
to  make  a  payment  to  Dialoc  in the future equal to approximately 6% of any
payment  it  receives from Checkpoint Systems Inc. ("Checkpoint") resulting from
litigation  brought  by  ID  Canada  against  Checkpoint.


On  April  30, 2004, Sentry purchased from Saburah Investments, Inc., an Ontario
corporation,  all  of  the  outstanding  common shares and Series "A" preference
shares  of  ID  Security Systems Canada Inc., an Ontario corporation, and all of
the  outstanding  capital  stock  of  ID  Systems  USA,  Inc.,  a  Pennsylvania
corporation  (collectively, "ID Systems"). ID Systems is a Toronto based company
engaged  in  anti-shoplifting  technology,  security  labeling,  radio frequency
identification  (RFID),  access control and library security. Sentry acquired ID
Systems  from Saburah in exchange for 30,000,000 Sentry common shares. The price
paid  per  Sentry  share  for  the  securities  of  ID  Systems  was  valued  at
approximately $0.11. A special committee of Sentry's Board of Directors received
an  opinion from Corporate Valuation Services confirming that the price paid for
the  acquisition  of  ID  Systems  was  fair  from  the  point of view of Sentry
shareholders.  As part of the purchase agreement, the proceeds of the ID Systems
litigation settlement will be distributed to the former ID Systems shareholders.
However  Saburah  and  Sentry  have  agreed  that  Sentry may require Saburah to
purchase  additional  Sentry common shares under certain circumstances. Sentry's
Board  of  Directors  and  shareholders owning a majority of Sentry common stock
approved  the  acquisition  of  ID  Systems.


Other  benefits  flowing to Sentry/ID Systems via the purchase of ID Systems are
as  follows:

-     ID  Systems  and Sentry continue as the exclusive distributor in North and
South  America  for  a  period  of  five years for all Dialoc products including
Laserfuse  radio  frequency  security  labels  and  all  RFID  products.

-     Dialoc  becomes  the  exclusive  distributor  in Europe and Asia of labels
manufactured  by  ID  Systems'  security  label manufacturing subsidiary, Custom
Security  Industries  Inc.  ("CSI").

-     CSI  acquires  the right to purchase Laserfuse raw material for processing
into  finished  security labels in its Toronto plant in order to reduce the cost
of  production.


-     CSI acquires the option to purchase a non-exclusive license to manufacture
complete  Laserfuse  security  labels  for  a  period of 10 years subject to the
payment  of  $500,000  and  a  running  royalty  of  $0.001  per  label.

-     Dialoc  will  continue  to  be  a dealer for Sentry products in Europe and
Asia.

The  purchase  price  of  the  ID Systems acquisition  was  as  follows:

                                                             (in thousands)

     Value of Sentry Technology Corporation common stock     $     3,300
     Transaction  costs                                               68
                                                             -----------
     Total  purchase  price                                  $     3,368
                                                             ===========

Under  the  purchase  method of accounting, the total purchase price as detailed
above  was  allocated  to  ID System's net tangible assets and intangible assets
based  on  their  preliminary  fair  values  as  of April 30, 2004, which are as
follows:

                                                             (in  thousands)

     Cash                                                    $     150
     Accounts  receivable                                        1,511
     Inventories                                                 1,264
     Prepaid  expenses  and  other  current  assets                831
     Property  and  equipment                                      470
     Deferred  charges                                              15
     Bank  debt                                                   (998)
     Accounts  payable  and  accrued  liabilities                 (540)
     Other  liabilities                                           (923)
                                                             ---------
     Net  tangible  assets                                       1,780
     Goodwill                                                    1,588
                                                             ---------
     Total  purchase  price                                  $   3,368
                                                             =========

The  Company  is  still  in  the  process  of  obtaining  final  support for the
valuations  of certain intangible assets; accordingly allocation of the purchase
price  is  subject  to modification in the future.  Any such modification is not
expected  to  be  significant.  On  an  ongoing  basis, Sentry will evaluate the
carrying  value  versus the discounted cash benefit expected to be realized from
the  performance  of  the underlying operations and adjust for any impairment in
value.


The  Company  is  still  in  the  process  of  obtaining  final  support for the
valuations  of certain intangible assets; accordingly allocation of the purchase
price  is  subject  to modification in the future.  Any such modification is not
expected  to  be  significant.  On  an  ongoing  basis, Sentry will evaluate the
carrying  value  versus the discounted cash benefit expected to be realized from
the  performance  of  the underlying operations and adjust for any impairment in
value.

Our  condensed  consolidated  statements  of operations include the revenues and
expenses  of  ID  Systems  from  May  1,  2004.

The  following supplemental pro forma information is presented to illustrate the
effects  of  the  acquisition  on the historical operating results for the three
month  and  six month periods ended June 30, 2004 and 2003 as if the acquisition
had  occurred  at  the  beginning  of  each  respective  period:

<TABLE>
<CAPTION>
                                                        Three Months Ended     Six Months Ended
                                                               June 30,            June 30,
<S>                                                    <C>         <C>         <C>      <C>
                                                           2004      2003        2004     2003
                                                       ----------  ---------    -------  -------
                                                          (in thousands, except per share data)

Revenues. . . . . . . . . . . . . . . . . . . . . . .  $    4,880   $   3,784   $ 9,066  $ 8,629
Income (loss) before extraordinary item . . . . . . .  $       14   $      25*  $  (103) $  (439)*
Net income (loss) . . . . . . . . . . . . . . . . . .  $       14   $     547*  $  (103) $    83*
Net income (loss) per share . . . . . . . . . . . . .  $    (0.00)  $    0.00   $ (0.00) $  0.00
</TABLE>


*The  income  (loss) before extraordinary item in the three and six months ended
June  30,  2004  includes  an  income  tax  benefit  of  $348 resulting from the
utilization  of net operating loss carryforwards. Net income in the 2003 periods
includes  both  the  $348  tax  benefit and the $522 extraordinary gain from the
extinguishment  of  debt.


NOTE  C  --  Convertible  Debenture
-----------------------------------
On  April  30,  2004,  Sentry  entered  into  a  $2,000,000  secured convertible
debenture  with  Brascan  Technology Fund ("Brascan"), an alternative investment
fund  established  by  Brascan  Asset  Management,  to  invest  in  early stage,
technology-based  companies  with  high  growth  potential.

Key  terms  of  the  transaction  are  as  follows:

-     Four-year  term.
-     Interest  rate  of  8%.
-     Redeemable  at  Sentry's  option  after  18  months.
-     Conversion  price equal to the market price, at time of conversion, less a
      discount  of  30%  with  a  maximum  conversion  price  of  $0.12  per
      share.
-     Conversion is at the option of Brascan when market share price is
      equal  to  or  greater  than  $0.17  per  share  or with the
      approval  of  Sentry's  Board  of  Directors when the market
      share  price  is  less  than  $0.17  per  share.
-     Sentry  will  provide  most  favored pricing to all Brascan affiliates and
      expects  to be a supplier of security and identification products to the
      Brascan affiliates.
-     Brascan  was  issued warrants for 5,000,000 shares of Sentry common stock,
      priced  at  $0.15  per  share,  exercisable  anytime within the next four
      years.
-     Brascan  is  entitled  to  one seat on Sentry's Board of Directors or will
      participate  as  an  observer.

The  Debenture is secured by a general security interest over all the assets and
properties of Sentry.  The amount is subordinate to the existing CIT and Bank of
Montreal  credit  facilities.

The  proceeds  of  the financing, to be used primarily for working capital, were
allocated  between  the debenture ($1,835,000) and the warrants ($165,000) based
on  their  respective  fair values in accordance with EITF 00-27 (Application of
Issue 98-5 to Certain Convertible Instruments).  The difference between the face
value  of  the debenture and the allocated value will be charged to interest and
financing  expenses  over  the  term  of  the  debenture.

Certain  other  warrants  to  purchase  425,000 shares of Sentry common stock at
exercise prices ranging from $0.18 to $0.20 per share were issued in conjunction
with  the convertible debenture.  The warrants are exercisable over one to three
years.  The fair value of these warrants ($49,000) will be charged to operations
over  the  life  of  the  warrants.

As  a  condition  of  the  financing,  Sentry  also  acquired  ID  Systems.

Sentry's  Board of Directors and shareholders owning a majority of Sentry common
stock  approved  the  transaction  with  Brascan.

Sentry  requires  liquidity  and  working  capital  to  finance  increases  in
receivables  and  inventory  associated  with sales growth, payments to past due
vendors  and,  to a lesser extent, for capital expenditures.  We had no material
capital  expenditure or purchase commitments as of June 30, 2004.  We anticipate
that  current  cash reserves, cash generated by the operations of Sentry and its
new  ID  Systems  subsidiaries  and  the  financing  provided  by  the  Brascan
transaction  and  sale  of  stock  to  Saburah  will  be adequate to finance the
Company's  anticipated  working  capital  requirements as well as future capital
expenditure  requirements  for  at  least  the  next  twelve  months.


NOTE  D  --  Inventories
------------------------
Inventories  consist  of  the  following:

                          June  30,  2004       December  31,  2003
                          ---------------       -------------------
                                       (in  thousands)
Raw  materials             $     831               $     449
Work-in-process                  392                     283
Finished  goods                2,052                   1,123
                               -----                   -----
                           $   3,275               $   1,855
                           =========               =========



Reserves  for excess and obsolete inventory totaled $2,111,000 and $2,148,000 as
of June 30, 2004 and December 31, 2003, respectively and have been included as a
component  of  the  above  amounts.







NOTE  E  --  Credit  Facilities
-------------------------------
On April 30, 2004, Sentry's subsidiary, ID Security Systems Canada Inc., entered
into  credit  facilities  with  Bank  of  Montreal,  replacing its former credit
facility.  Facility  1  is a Canadian $1.5 million (U.S. $1.1 million) Overdraft
Lending  Facility, which is subject to certain limitations based on a percentage
of  eligible  accounts  receivable  and inventories as defined in the agreement.
Interest  on  the  overdraft facility is payable monthly at the Bank of Montreal
commercial  prime  lending  rate  (3.75%  at  June 30, 2004), plus 1% per annum.
Facility  2  is  a Canadian $250,000 (U.S. $187,000) Non-Revolving Demand Credit
facility  incurred  to  refinance an existing term loan with a previous lender.
Principal  payments  of  Canadian  $6,945  plus  interest are payable monthly in
arrears.  Borrowings  under  these  facilities  are  secured by the assets of ID
Systems.  At  June  30,  2004, approximately U.S. $974,000 was outstanding under
the  Bank  of  Montreal  facilities.



NOTE  F  --  Related  Party  Transactions
-----------------------------------------
On  March  27,  2002,  Peter  Murdoch,  our President and CEO, exercised a stock
option  for  two  million  shares of Sentry common stock at an exercise price of
$0.06 per share, which was paid for through the issuance of a promissory note in
the  amount  of  $120,000.  The  principal of the note was secured by the option
shares  and was repayable no later than January 8, 2006.  The note bore interest
at  prime  less .75%.  Mr. Murdoch satisfied the note and accrued interest as of
March  31,  2004.  The  note  had been reflected as a reduction of shareholders'
equity  on  the  balance  sheet  as  of  December  31,  2003.

On  January 22, 2004, Robert Furst, a Sentry Director, made a bridge loan to the
Company  in  the  amount of $100,000.  The interest rate on the loan was 15% per
annum  and  the  loan  was  due  on  or  before  April  30, 2004.  As additional
consideration  for  the  loan,  Mr. Furst received a warrant to purchase 300,000
shares  of  Sentry  common  stock  at  a price of $0.17 per share, which was the
market  price  on  the  date  of  grant (valued at $3,000).  The warrant expires
January  21,  2009.  The  note  was  repaid  in  full  on  April  30,  2004.



NOTE  G  --  Earnings  Per  Share
---------------------------------
The  earnings  per  share  calculations (basic and diluted) at June 30, 2004 and
2003  are  based  upon  the weighted average number of common shares outstanding
during  each  period.  There  are  no  reconciling  items  in  the  numerator or
denominator  of  the  earnings  per  share calculations in either of the periods
presented.  Options  to  purchase 1,499,948 and 1,615,912 shares of common stock
with  a  weighted  average exercise price of $0.59 and $0.57 were outstanding at
June  30, 2004 and 2003, but were not included in the computation of diluted net
loss  per  share  because  their  effect  would  be  antidilutive or immaterial.

The  Company  accounts  for  stock-based awards to employees using the intrinsic
value  method  in  accordance  with  Accounting Principles Board Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees."

SFAS  No.  123, Accounting for Stock-Based Compensation, requires the disclosure
of  pro forma net income and earnings per share had the Company adopted the fair
value  method  as  of the beginning of fiscal 1995. Under SFAS No. 123, the fair
value of stock-based awards to employees is calculated through the use of option
pricing  models,  even  though  such  models were developed to estimate the fair
value  of  freely  tradable,  fully  transferable  options  without  vesting
restrictions,  which  significantly  differ  from  the  Company's  stock options
awards. These models also require subjective assumptions, including future stock
price  volatility  and  expected  time  to  exercise,  which  greatly affect the
calculated values. No options were granted in 2004 or 2003. The weighted average
fair  value  of  the  options  granted  for  the year ended December 31, 2001 is
estimated  at  $0.05,  using  the  Black-Scholes  option  pricing model with the
following  weighted  average  assumptions:  expected  life  of five years; stock
volatility,  147%  in  2001;  risk  free  interest  rates,  4.8% in 2001, and no
dividends  during  the  expected term. The Company's calculations are based on a
multiple option valuation approach and forfeitures are recognized as they occur.
If  the  computed  fair  values  of  the  post 1995 awards had been amortized to
expense  over  the vesting period of the awards, pro forma net income attributed
to  common  shareholders  would  have  been  as  follows:














<TABLE>
<CAPTION>
                                                        Three Months Ended     Six Months Ended
                                                              June 30,             June 30,
<S>                                                    <C>         <C>         <C>      <C>
                                                          2004       2003       2004    2003
                                                       ----------  --------   -------  -------
                                                        (in thousands, except per share data)
Net income (loss):
     As reported. . . . . . . . . . . . . . . . . . .  $     12    $   530    $ (180)   $  36
     Pro forma. . . . . . . . . . . . . . . . . . . .  $      9    $   512    $ (189)   $   -

Net income (loss) per share:
     As reported. . . . . . . . . . . . . . . . . . .  $   0.00    $  0.01    $(0.00)   $0.00
     Pro forma. . . . . . . . . . . . . . . . . . . .  $   0.00    $  0.01    $(0.00)   $0.00

</TABLE>

The  fair  value  of each option granted is estimated on the date of grant using
the Black-Scholes option-pricing model.  No options were granted in the three or
six-month  periods  ended  June  30,  2004  or  2003.



NOTE  H  --  Subsequent  Event
------------------------------
On August 1, 2004, ID Systems and Checkpoint entered into a settlement agreement
effective  July  30,  2004,  pursuant  to  which Checkpoint agreed to pay $19.95
million, in full and final settlement of claims covered by antitrust litigation.
Payment  in  full  was  received  on  August  5,  2004.  As provided when Sentry
purchased  ID  Systems,  the  proceeds  of the settlement will be distributed to
former  shareholders  of  ID  Systems,  after  payment  of  litigation  fees and
expenses.  The  agreement  includes  mutual  releases  between  the  parties for
complaints  arising  from  activities prior to the date of the agreement, except
for  any  contractual obligations and any future claims for patent, copyright or
trademark  infringement.  The  agreement  is  not  an  acknowledgement  of  any
wrongdoing  or  liability  by  either party. A Stipulation of Dismissal has been
filed  with  the  Third  Circuit  Court of Appeals to finally conclude the legal
proceedings.

While  Sentry  did  not obtain an interest in the litigation settlement, Saburah
and  Sentry  have  agreed that Sentry may require Saburah to purchase additional
Sentry  common shares equal to approximately 4.5% of any amount received (net of
legal  fees  and  expenses) from Checkpoint. The price per share has been set at
80%  of  the  previous  20 days trading average prior to the announcement of the
settlement.  Sentry's  Board of Directors has exercised this option and based on
the settlement amount, will sell to Saburah approximately 4.8 million shares for
approximately  $640,000.  Sentry and its subsidiaries also expects to receive an
additional  $760,000  through  the repayment of debt incurred by Dialoc prior to
the  ID Systems acquisition and the reimbursement for litigation expenses, which
are  recorded  as  assets  on  the  balance  sheet  as  of  June 30, 2004. These
transactions,  totaling $1.4 million, represent the total cash flowing to Sentry
directly  and  indirectly  as  a  result  of  the  Checkpoint  lawsuit.


After the acquisition of ID Systems and sale of additional shares as a result of
the  litigation  settlement, Sentry will have 120,559,724 shares of common stock
outstanding.  Mr.  Murdoch,  directly  or  indirectly  through  his ownership of
Saburah,  will  own  or control 49.5% of the outstanding common stock of Sentry.





SENTRY  TECHNOLOGY  CORPORATION
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of  Operations.

Certain  Factors  That  May  Affect  Future  Results
----------------------------------------------------

Information  contained  or  incorporated by reference in this periodic report on
Form  10-QSB  and  in  other  SEC  filings  by  Sentry contains "forward-looking
statements"  within  the meaning of the Private Securities Litigation Reform Act
of  1995  which can be identified by the use of forward-looking terminology such
as  "believes,"  "expects,"  "may,"  "will,"  "should"  or  "anticipates" or the
negative  thereof,  other  variations  thereon  or comparable terminology, or by
discussions  of  strategy.  These  forward-looking  statements  involve  certain
significant  risks  and  uncertainties, and actual results may differ materially



from the forward-looking statements. For further details and discussion of these
risks  and  uncertainties  see  Sentry  Technology  Corporation's  SEC  filings
including,  but  not  limited to, its annual report on Form 10-KSB. No assurance
can  be given that future results covered by the forward-looking statements will
be  achieved,  and  other  factors  could  also  cause  actual  results  to vary
materially  from  the future results covered in such forward-looking statements.
We  do  not  undertake  to  publicly update or revise any of our forward-looking
statements  even if experience or future changes show that the indicated results
or  events  will  not  be  realized.

Results  of  Operations:
------------------------

On  April  30,  2004, Sentry purchased from Saburah Investments, Inc. all of the
outstanding  common  shares  and  Series  "A"  preference  shares of ID Security
Systems Canada Inc., and all of the outstanding capital stock of ID Systems USA,
Inc. (collectively, "ID Systems"). ID Systems is a Toronto based company engaged
in  anti-shoplifting  technology,  security  labeling,  radio  frequency
identification  (RFID),  access  control  and  library  security.  Our condensed
consolidated  statements  of  operations include the revenues and expenses of ID
Systems  from  May  1,  2004.


Consolidated  revenues  were  82%  and  22%  higher in the quarter and six month
period  ended  June 30, 2004 than in the quarter and six month period ended June
30,  2003.  ID Systems revenues for the two months ended June 30, 2004 were $0.9
million.  Our  backlog  of  orders,  which  we expect to deliver within the next
twelve  months,  increased  to $4.1 million at June 30, 2004 as compared to $3.4
million  at  June 30, 2003.  Total revenues for the periods presented are broken
out  as  follows:

<TABLE>
<CAPTION>
                                 Q-2       Q-2     %         6 Mos.   6 Mos.     %
                                 2004     2003    Change      2004     2003    Change
                               -------   ------   ------    -------   ------   -------
<S>                            <C>       <C>      <C>       <C>       <C>      <C>
                                (in thousands)               (in thousands)

EAS . . . . . . . . . . . . .  $ 1,136  $   546     108     $ 1,607   $1,015      58
CCTV. . . . . . . . . . . . .      970      470     106       1,569    1,947     (19)
SentryVision. . . . . . . . .    1,044      485     115       1,792      859     109
                               -------  -------  ------     -------   ------  -------
Total sales . . . . . . . . .    3,150    1,501     110       4,968    3,821      30
Service revenues and other. .    1,091      825      32       2,219    2,079       7
                               -------  -------  ------     -------   ------  -------
Total revenues. . . . . . . .  $ 4,241  $ 2,326      82     $ 7,187   $5,900      22
                               =======  =======  ======     =======   ======  =======
</TABLE>


All of the increase in sales of EAS products in the second quarter and first six
months  of  2004 was attributable to ID Systems sales which totaled $0.9 million
of  the  respective  totals  as  compared to the same periods in the prior year.
Sentry's  historical  comparative  sales  of EAS products decreased in both 2004
periods  presented.  While  there  was  an  increase in CCTV sales in the second
quarter  of 2004 as a result of higher sales to Lowe's Home Centers, there was a
decrease  in the six months of 2004 is a result of lower sales to two customers.
In the first half of 2003, we had sales of $0.6 million to Home Depot, which did
not  repeat  in  2004  and  we  lost  $0.6  million  in  revenues in 2004 from a
significant  customer  that  decided  to  source  their CCTV purchases directly.
Direct sales of SentryVision  increased in 2004, including sales to Wal-Mart UK,
Target,  Reno  Depot  and Lane Limited.  Service revenues and other increased in
the  second  quarter  primarily  as  a  result  of  higher revenue from CCTV and
SentryVision  installations  than  in the second quarter and first six months of
2003.

Cost  of  sales  were 53% of total sales in both the three and six month periods
ended  June  30,  2004  compared to 56% and 65% in the same periods of the prior
year.  We  have outsourced all significant manufacturing operations beginning in
the  second  quarter of 2003, resulting in lower product costs.  The decrease in
the  cost  of  sales percentage in the first six months of 2004 is primarily the
result of the elimination of the charge to cost of sales of under absorbed fixed
overhead  costs due to the termination of in-house manufacturing and the move to
a  smaller  facility.



The  increase  in  customer service expenses in the second quarter and first six
months  of  2004  is a primarily a result of higher sales of systems we install.
We have decreased the number of customer service employees and increased the use
of  outside service contractors in order to better manage our total net customer
service  costs  during  fluctuations in activity levels from quarter to quarter.
However,  our  efforts  were  hampered  somewhat  by our inability to maintain a
proper  level  of  service  parts  due  to inadequate trade credit and financial
resources during the first six months of 2004, which resulted in inefficiencies.
As  a  result  of  our  recent financing, we have recently restocked our service
parts  inventory  enabling  us to deliver service in a more timely and efficient
manner.

Selling,  general  and  administrative  expenses  were 43% and 17% higher in the
three  and  six  month  periods  ended  June  30, 2004 when compared to the same
periods  of  the  previous  year primarily as a result of the ID Systems merger.
However,  as  a  percent  of  total  revenues,  total  costs  decreased.

We  dedicated  the same amount to research and development in the second quarter
and  first  six months of 2004 when compared to the second quarter and first six
months  of  2003.

As  a  result of the restructuring of operations, the increase in sales activity
levels  and the merger with ID Systems, we were able to show operating income of
$120,000  and  $53,000 in the three and six month periods ended June 30, 2004 as
compared  to  operating  losses  of $188,000 and $492,000 in the same periods of
2003.

Total interest and financing costs decreased in the second quarter and first six
months  of  2004, principally as a result of lower capital lease interest due to
the  cancellation of the sale and leaseback agreement on our former headquarters
facility.

In  the  second  quarter  of  2003,  the  Company entered into a settlement with
certain  of  its  vendors  for  past due obligations which resulted in a gain of
approximately  $522,000  (net  of  $348,000  income  taxes) which represents the
difference  between  the  amounts due before the settlement and the total amount
payable, including the value of the common stock, as a result of the settlement.

In  2004, the income tax provision results from taxable income of our ID Systems
subsidiary, which cannot be offset by Sentry's net operating loss carryforwards.
In  2003, the $348,000 income tax provision recognized on the extraordinary gain
was  offset  by  an  equivalent  income  tax  benefit generated from the current
period's  loss  from  operations  and  the  utilization  of  net  operating loss
carryforwards.

As a result of the foregoing, Sentry had net income of $12,000 and a net loss of
$180,000  in the quarter and first six months ended June 30, 2004 as compared to
net profits of $530,000 and $36,000 in the quarter and six months ended June 30,
2003.

Liquidity  and  Capital  Resources  as  of  June  30,  2004

In  the second quarter of 2003, to address our reduced revenue levels, decreased
financial  position  and  recurring  operating  losses,  our  Board of Directors
approved  a  2003  restructuring  plan  to  strengthen  the  Company's operating
efficiencies and to better align its operations with current economic and market
conditions.  We  were  successful  in  implementing many changes to our business
plan  during  2003  including  the  downsizing  of  operations and relocation to
smaller  facilities,  the  negotiations with past due trade creditors and former
landlord,  the  outsourcing  of  manufacturing  and the expansion of our Service
Partner  program  to  augment  service  and  installations.  The  successful
implementation  of  this  restructuring has resulted in substantial gross margin
improvements  and  reductions  in operating  expenses  beginning  after  the
first  quarter  of  2003.

Over  the  last  several years, our largest shareholder, Dialoc ID Holdings B.V.
("Dialoc")  was  not  able  to provide us with additional financial support.  On
April  19,  2004,  Dialoc  sold  39,066,927  Sentry  common shares (representing
approximately  46%  of  the  total issued and outstanding shares of Sentry) to a
group of investors.  Of the group, Saburah Investments Inc. ("Saburah") acquired
22,758,155  shares,  Mr.  Robert  Furst 14,554,386 shares and Dr. Morton Roseman
1,754,386  shares.  Peter  L. Murdoch, President, CEO and Director of Sentry, is
the  owner  of  Saburah.  Mr.  Furst  is also a long-standing member of Sentry's
Board of Directors.  As a result of this transaction, Messers Angel and de Nood,
Principals  of  Dialoc,  have  resigned  from  Sentry's  Board  of  Directors.


In  addition  to  the  purchase of Sentry's common shares, Saburah also acquired
100% of ID Security Systems Canada, Inc. and ID Systems USA Inc. ("ID Systems").
ID  Systems  is  a Toronto based company engaged in anti-shoplifting technology,
security  labeling,  radio  frequency  identification (RFID), access control and
library  security.  The  price  paid to Dialoc by Saburah and Murdoch for Sentry
and  ID  Systems  shares  in  cash,  debt  assumption and other consideration is
approximately  $3.6  million  plus  the  surrender  of Murdoch's 15% interest in
Dialoc.  Saburah has also agreed to make a payment to Dialoc in the future equal
to  approximately  6%  of  any  payment it receives from Checkpoint Systems Inc.
resulting  from  litigation  brought  by  ID  Canada  against  Checkpoint.

On  April  30, 2004, Sentry purchased from Saburah Investments, Inc., an Ontario
corporation,  all  of  the  outstanding  common shares and Series "A" preference
shares  of  ID  Security Systems Canada Inc., an Ontario corporation, and all of
the  outstanding  capital  stock  of  ID  Systems  USA,  Inc.,  a  Pennsylvania
corporation  (collectively,  "ID  Systems").  ID  Systems  is  a  Toronto  based
company  engaged  in  anti-shoplifting  technology,  security  labeling,  radio
frequency  identification  (RFID),  access control and library security.  Sentry
acquired  ID  Systems  from  Saburah  in  exchange  for 30,000,000 Sentry common
shares.  The  price  paid  per Sentry share for the securities of ID Systems was
valued  at  approximately  $0.11.  A  special  committee  of  Sentry's  Board of
Directors  received an opinion from Corporate Valuation Services confirming that
the price paid for the acquisition of ID Systems was fair from the point of view
of  Sentry  shareholders.  Sentry's Board of Directors and shareholders owning a
majority  of  Sentry  common  stock  approved  the  acquisition  of  ID Systems.


The  purchase  price  of  the  acquisition  was  approximately  $3.4  million
representing $3.3 million in the value of Sentry common stock issued and $0.1 in
transaction  expenses.  Sentry  will acquire $1.8 million in net tangible assets
and  assign the remaining $1.6 million to goodwill. (See Note B to the condensed
consolidated  financial  statements).  On an ongoing basis, Sentry will evaluate
the  carrying  value of the goodwill versus the discounted cash benefit expected
to  be realized from the performance of the underlying operations and adjust for
any  impairment  in  value.

Other  benefits  flowing to Sentry/ID Systems via the purchase of ID Systems are
as  follows:

-     ID  Systems  and Sentry continue as the exclusive distributor in North and
      South  America  for  a  period  of  five years for all Dialoc products
      Including Laserfuse  radio  frequency  security  labels  and  all  RFID
      products.

-     Dialoc  becomes  the  exclusive  distributor  in Europe and Asia of labels
      manufactured  by  ID  Systems'  security  label manufacturing subsidiary,
      Custom Security  Industries  Inc.  ("CSI").

-     CSI  acquires  the right to purchase Laserfuse raw material for processing
      into  finished  security labels in its Toronto plant in order to reduce
      the cost of  production.

-     CSI acquires the option to purchase a non-exclusive license to manufacture
      complete  Laserfuse  security  labels  for  a  period of 10 years subject
      to the payment  of  $500,000  and  a  running  royalty  of  $0.001  per
      label.

-     Dialoc  will  continue  to  be  a dealer for Sentry products in Europe and
      Asia.

On  April  30,  2004, ID Systems entered into new credit facilities with maximum
availability  of  Canadian  $1.75  million  (U.S. $1.3 million) with the Bank of
Montreal.   The  facilities  provide  working  capital  for  ID  Systems and all
borrowings  are  secured  by  the  assets  of  ID  Systems.

We continued to pursue additional debt or equity financing through our financial
advisors  and  on  April  30,  2004,  Sentry  entered  into a $2,000,000 secured
convertible  debenture  with Brascan Technology Fund ("Brascan"), an alternative
investment  fund  established  by  Brascan  Asset Management, to invest in early
stage,  technology-based  companies with high growth potential.  The proceeds of
the  financing  will  be  used  primarily  for  working  capital.

Key  terms  of  the  transaction  are  as  follows:

-     Four-year  term.
-     Interest  rate  of  8%.
-     Redeemable  at  Sentry's  option  after  18  months.
-     Conversion  price equal to the market price, at time of conversion, less a
      discount  of  30%  with  a  maximum  conversion  price of $0.12 per share.
-     Conversion is at the option of Brascan when market share price is equal to
      or  greater  than  $0.17  per  share  or  with the approval of Sentry's
      Board of Directors when  the  market  share  price  is  less  than  $0.17
      per  share.
-     Sentry  will  provide  most  favored pricing to all Brascan affiliates and
      expects  to be a supplier of security and identification products to the
      Brascan affiliates.
-     Brascan  was  issued warrants for 5,000,000 shares of Sentry common stock,
      priced  at  $0.15  per  share,  exercisable  anytime within the next four
      years.
-     Brascan  is  entitled  to  one seat on Sentry's Board of Directors or will
      participate  as  an  observer.

The  Debenture is secured by a general security interest over all the assets and
properties of Sentry.  The amount is subordinate to the existing CIT and Bank of
Montreal  credit  facilities.

Sentry  also  acquired  ID  Systems  as  a  condition  of  the  financing.

Sentry's  Board of Directors and shareholders owning a majority of Sentry common
stock  approved  the  transaction  with  Brascan.

As  of  June 30, 2004, we had borrowings of approximately $1.9 million with CIT,
the  maximum  amount  available  under  the  revolving  credit facility and $1.0
million  with the Bank of Montreal.  Through the first half of 2004, most of our
trade  vendors  continued  to  require  cash  in advance or COD payments for our
purchases.  Prior  to the Brascan financing, we had to supplement our borrowings
under  the  CIT  credit facility with expensive purchase order financing through
EPK Financial Corporation ("EPK").  As a result of the Brascan financing, during
the  second  quarter of 2004, we repaid all amounts owed to EPK and discontinued
our  use  of  this  facility.

On August 1, 2004, ID Systems and Checkpoint entered into a settlement agreement
effective  July  30,  2004,  pursuant  to  which Checkpoint agreed to pay $19.95
million,  in  full  and  final  settlement  of  claims  covered by the antitrust
litigation.  Payment  in  full  was received on August 5, 2004. As provided when
Sentry  purchased ID Systems, the proceeds of the settlement will be distributed
to  former  shareholders  of  ID  Systems,  after payment of litigation fees and
expenses.  The  agreement  includes  mutual  releases  between  the  parties for
complaints  arising  from  activities prior to the date of the agreement, except
for  any  contractual obligations and any future claims for patent, copyright or
trademark  infringement.  The  agreement  is  not  an  acknowledgement  of  any
wrongdoing  or  liability  by  either party. A Stipulation of Dismissal has been
filed  with  the  Third  Circuit  Court of Appeals to finally conclude the legal
proceedings.

While  Sentry  did  not obtain an interest in the litigation settlement, Saburah
and  Sentry agreed that Sentry may require Saburah to purchase additional Sentry
common  shares  equal to approximately 4.5% of any amount received (net of legal
fees  and  expenses)  from Checkpoint. The price per share was set at 80% of the
previous  20  days  trading average prior to the announcement of the settlement.
Sentry's  Board  of  Directors  has  exercised  this  option  and  based  on the
settlement  amount,  will  sell  to Saburah approximately 4.8 million shares for
$640,000.  Sentry  also  expects to be reimbursed for legal costs advanced by ID
Systems,  as  well as for loans and trade receivables of approximating $760,000,
which  are  recorded  as  assets on the balance sheet as of June 30, 2004. These
transactions,  totaling  $1.4  million,  represent  the  cash  flowing to Sentry
directly  and  indirectly  as  a  result  of  the  Checkpoint  lawsuit.


After the acquisition of ID Systems and sale of additional shares as a result of
the  litigation  settlement, Sentry will have 120,559,724 shares of common stock
outstanding.  Mr.  Murdoch,  directly  or  indirectly  through  his ownership of
Saburah,  will  own  or control 49.5% of the outstanding common stock of Sentry.


We  will  require  liquidity  and  working  capital  to  finance  increases  in
receivables  and  inventory  associated  with sales growth, payments to past due
vendors  and,  to a lesser extent, for capital expenditures.  We had no material
capital  expenditure or purchase commitments as of June 30, 2004.  We anticipate
that  current  cash reserves, cash generated by the operations of Sentry and its
new  ID  Systems  subsidiaries, as well as the financing provided by the Brascan
transaction  and  the  sale  of stock to Saburah will be adequate to finance the
Company's  anticipated  working  capital  requirements as well as future capital
expenditure  requirements  for  at least the next twelve months.  As a result of
the  financing,  Sentry  will no longer need to use the expensive purchase order
financing  provided by EPK in order to finance inventory purchases.  As well, by
agreement  with  CIT,  the  previous  monthly  costs  for  outside  management
consultants  were  also  eliminated  as  of  May  2004.


Related  Party  Transactions
----------------------------
Details  of  related  party  transactions  are  included  in Note F of this Form
10-QSB.


Item  3.  Controls  and  Procedures

As  of  the  end  of  the  period  covered  by  this  report,  Sentry Technology
Corporation  carried  out  an  evaluation,  under  the  supervision and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer  and  Chief  Financial  Officer,  of the effectiveness of the
design  and  operation  of  the  Company's  disclosure  controls  and procedures
pursuant  to Rule 13a-15 of the Securities and Exchange Act of 1934.  Based upon
that  evaluation,  the  Chief  Executive  Officer  and  Chief  Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting  them  to  material  information related to the Company that is
required to be included in Sentry Technology Corporation's periodic SEC filings.

There  has  been  no  change  in  the  Company's internal control over financial
reporting during the period covered by this report that has materially affected,
or  is  reasonable  likely  to materially affect, the Company's internal control
over  financial  reporting.










PART  II  -  OTHER  INFORMATION
-------------------------------

Item  1.  Legal  Proceedings

ID  Security  Systems  Canada  Inc.  versus  Checkpoint  Systems,  Inc.

On May 24, 2002, the jury in the Civil Action No. 99-CV-577 in the United States
District  Court  for the Eastern District of Pennsylvania, filed by plaintiff ID
Security  Systems  Canada  Inc.  ("ID Systems") against Checkpoint Systems, Inc.
("Checkpoint"),  held  against  ID  Systems  on  the  plaintiff's  claim  for
Monopolization  of  Commerce,  but  in  favor  of  the  ID  Systems on claims of
Attempted  Monopolization  and  Conspiracy to Monopolize.  In addition, the jury
held  in  favor  of  the  ID  Systems  on  two  tort  claims related to tortious
interference  and  unfair  competition.  Judgment  was entered on the verdict in
favor  of  the  plaintiff,  after  trebling, in the amount of $79.2 million plus
attorneys'  fees  and  costs  to  be  determined  by  the  Court.

On  March  28,  2003, the Court issued an order that vacated the jury verdict on
the  antitrust  claims  and  reduced  the  damages  award  related  to  tortious
interference  and unfair competition from $19 million to $13 million. Checkpoint
subsequently  filed  an  additional  motion to further reduce the $13 million by
$2.1 million based on a prior agreement between the parties and a previous Order
by  the  Court.  The  Court  granted  the  Checkpoint's  motion,  and on May 20,
2003  further  reduced  the  judgment from $13 million to $10.9 million.  On the
same date, the Court stayed execution of the judgment upon the posting of a bond
in  the  amount  of  $11.3  million  by  Checkpoint.

Both  ID  Systems  and  Checkpoint  filed  appeals to the Third Circuit Court of
Appeals related to the various decisions of the Court.  Oral arguments for these
appeals  were  heard  on  March  30,  2004.

On August 1, 2004, ID Systems and Checkpoint entered into a settlement agreement
effective  July  30,  2004,  pursuant  to  which Checkpoint agreed to pay $19.95
million,  in  full  and  final  settlement  of claims covered by the litigation.
Payment  in  full  was  received  on  August  5,  2004.  As provided when Sentry
purchased  ID  Systems,  the  proceeds  of the settlement will be distributed to
former  shareholders  of  ID  Systems,  after  payment  of  litigation  fees and
expenses.  The  agreement  includes  mutual  releases  between  the  parties for
complaints  arising  from  activities prior to the date of the agreement, except
for  any  contractual obligations and any future claims for patent, copyright or
trademark  infringement.  The  agreement  is  not  an  acknowledgement  of  any
wrongdoing  or  liability  by  either party. A Stipulation of Dismissal has been
filed  with  the  Third  Circuit  Court of Appeals to finally conclude the legal
proceedings.


Item  5  -  Other  Information
==============================

See  Note  B  to  the  condensed  consolidated  financial  statements.
======================================================================


Item  6  -  Exhibits  and  Reports  on  Form  8-K

(a)     Exhibits:

10.1  -  Loan  Agreement  between  ID  Security  Systems Canada Inc. and Bank of
Montreal  dated  April  30,  2004.

31.1  -  Certification by the Chief Executive Officer Pursuant to Section 302 of
the  Sarbanes-Oxley  Act  of  2002.

31.2  -  Certification by the Chief Financial Officer Pursuant to Section 302 of
the  Sarbanes-Oxley  Act  of  2002.

32.1  -  Certification  by  the  Chief  Executive  Officer Pursuant to 18 U.S.C.
Section  1350  Adopted  Pursuant  to  Section  906  of the Sarbanes-Oxley Act of
2002.***

32.2  -  Certification  by  the  Chief  Financial  Officer Pursuant to 18 U.S.C.
Section  1350  Adopted  Pursuant  to  Section  906  of the Sarbanes-Oxley Act of
2002.***

***     In  accordance  with Item 601(b)(32)(ii) of Regulation S-K, this exhibit
shall not be deemed "filed" for the purposes of Section 18 of the Securities and
Exchange  Act of 1934 or otherwise subject to the liability of that section, nor
shall  it be deemed incorporated by reference in any filing under the Securities
Act  of  1933  or  the  Securities  Exchange  Act  of  1934.

(b)     Reports  on  Form  8-K - There were no Reports on Form 8-K filed in
the  three  months  ended  June 30,  2004.




<PAGE>


SIGNATURES

Pursuant  to  the  requirements  of the Securities and Exchange Act of 1934, the
registrant  had  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

                                SENTRY  TECHNOLOGY  CORPORATION
                                -------------------------------


Date:     August  16,  2004     By:     /S/   PETER  J.  MUNDY
          -----------------             ----------------------
                                        Peter  J.  Mundy,  Vice  President
                                        -- Finance and  Chief Financial Officer
                                        (Principal  Financial  and
                                              Accounting  Officer)






























































<PAGE>








                                                                    EXHIBIT 10.1

                              [GRAPHIC  OMITTED]


Branch  of  Account: First Canadian Place, Toronto, Ontario     Transit No. 0002
-----------------------------------------------------------     ----------------

                                                      OPERATING  LOAN  AGREEMENT
BANK  OF  MONTREAL                            WITH  AVAILMENT  IN  CDN.  DOLLARS
                                              (for  use  in all Provinces except
                                                                         Quebec)

To: Bank of Montreal                                        Date: April 30, 2004

     The  undersigned  hereby  requests  the  Bank  of  Montreal (the "Bank") to
provide a credit facility to the undersigned, subject to the following terms and
conditions:

1.     DEFINED  TERMS

     In  this Agreement, unless the subject matter or context otherwise require:

1.01     "Account"  shall  mean  the  Canadian Dollar Account or the U.S. Dollar
          --------
          Account,  whichever  is  applicable.

1.02     "Canadian Dollar Account"/ "U.S. Dollar Account" shall mean Account No.
          -----------------------    -------------------
          __________________  at  the  branch  designated  above.

1.03     "Facility  Fee"  shall  mean  a  fixed  monthly  fee  of  $  350.00.
          -------------

1.04     "Loan"  shall  mean at any time the aggregate of all amounts debited to
          ----
          the  Account  (including  without  limitation  cheques,  transfers,
          withdrawals,  interest,  costs,  charges  and  fees)  in excess of the
          aggregate  of  all  amounts credited to the Account for which the Bank
          has  given  value.  Amounts debited or credited to the Canadian Dollar
          Account shall be denominated in Canadian dollars while amounts debited
          or  credited  to  the U.S. Dollar Account shall be denominated in U.S.
          dollars.

1.05     "Loan  Limit"  shall  mean  One  Million  Five  Hundred
          -----------
          Thousand--------------------00/100  Canadian ($ 1,500,000.00 ) or such
          lesser amount as may be calculated by the Bank from time to time under
          the  Lending  Margin  Calculation,  if  any,  set  out in the Addendum
          hereto.

1.06     "Loan  Rate"  shall  mean  in respect of a Canadian Dollar Loan, a rate
          ----------
          equal  to  the  Bank's Prime Rate plus one per cent (1.00%) per annum.


1.07     "Prime  Rate"  shall  mean  the  floating  annual  rate  of  interest
          -----------
          established  from  time  to  time by the Bank as the reference rate it
          will  use  to  determine  the  rate of interest payable to the Bank by
          borrowers  from  the Bank in Canadian dollars in Canada and designated
          by  the  Bank  as its Prime Rate. The Prime Rate on the date hereof is
          ___________________  per  cent  (  ______%)  per  annum.


1.09     "Overdraft  Rate"  shall  mean  the annual rate of interest established
          ---------------
          from  time  to  time  by  the Bank as the interest rate it will use to
          calculate the interest payable on overdrawn accounts and designated by
          the  Bank  as  the  "Overdraft  Rate".  The Overdraft Rate on the date
          hereof  is  twenty  one  per  cent  (  21.00%)  per  annum.


<PAGE>

2.     ACCOUNT

2.01     The  undersigned  may  from  time  to time draw cheques on the Account,
         subject  to  the  terms  hereof.  Cheques drawn on the Canadian Dollar
         Account  shall be drawn in Canadian dollars; cheques drawn on the U.S.
         Dollar  Account  shall  be  drawn  in  U.S.  dollars.






2.02     The  undersigned  shall  not  at any time permit the Loan to exceed the
         Loan  Limit  and  shall  use  the  Account for business purposes only.

2.03     The  Bank  is  authorized  to debit the Canadian Dollar Account and the
         U.S.  Dollar  Account for all fees and interest required hereunder and
         for  all costs, charges and expenses referred to in paragraph 8.01 and
         in  any  other  agreement(s) the undersigned has entered into with the
         Bank.



3.     FACILITY  FEE

3.01     The undersigned shall pay the Facility Fee to the Bank, in the currency
         of  the  applicable Account, on the last day of each month in addition
         to all other fees applicable to the Account. Notwithstanding paragraph
         1.03,  the  amount of the Facility Fee shall be determined by the Bank
         from  time  to  time. The Facility Fee shall be payable for the credit
         facility  provided hereunder and for other standard reporting services
         provided  by  the  Bank  in  connection  with  the  Account.


4.     INTEREST

4.01     The  undersigned  shall,  both before and after demand or judgment, pay
         interest  at the Loan Rate on the daily closing balance of the Loan up
         to  the Loan Limit, such interest to be calculated and payable monthly
         on  the  last  day  of  each  month.


4.02     The  undersigned  shall,  both before and after demand or judgment, pay
         interest  at  the  Overdraft  Rate  on the amount of any daily closing
         balance  of  the Loan in excess of the Loan Limit, such interest to be
         calculated  and  payable  monthly  on  the last day of each month, but
         nothing  herein shall oblige the Bank to permit the Loan to exceed the
         Loan  Limit.


5.     OTHER  PAYMENTS

5.01      If any change occurring after the date of this Agreement in any law or
          in  any  interpretation  or  application  thereof  by any governmental
          authority  charged  with the administration thereof or compliance with
          any  guideline,  request  or  requirement from any fiscal, monetary or
          other  authority (whether or not having the force of law) shall either
          (i)  impose,  modify,  assess  or deem applicable any reserve, special
          deposit,  assessment  or  similar  requirement  on  account of or with
          respect  to  the  credit  facility  provided  by  the  Bank under this
          Agreement or (ii) impose on the Bank any other condition, restriction,
          limitation or (iii) make the Bank liable for any payment or tax of any
          kind  whatsoever  or  change  the basis of taxation of payments to the
          Bank  of  principal,  interest, fees or any other amount payable under
          this  Agreement(except  for  changes in the rate of tax on the overall
          net  income, profit or gains of the Bank) and the result of any of the
          foregoing  is to increase the cost to the Bank of providing the credit
          facility  under  this  Agreement  or  to  reduce  any amount otherwise
          receivable  by  the  Bank  under  this Agreement on account of or with
          respect  to  the  credit facility provided by the Bank hereunder, then
          the  undersigned agrees, within ten days after any demand by the Bank,
          to  commence  paying  to  the Bank amounts sufficient to reimburse the
          Bank  against  such  increased  cost  or  such  liability.



6.     DEMAND  AND  TERMINATION

6.01     The undersigned shall pay the Loan to the Bank ON DEMAND.  The Bank may
         at  any  time  terminate  the  credit  facility provided hereunder and
         demand  payment  of  the  Loan  by  notice  as  herein  provided.


<PAGE>

6.02     THE  BANK  MAY  REFUSE  TO  HONOR  ANY CHEQUE OR PERMIT ANY TRANSFER OR
         WITHDRAWAL FROM THE ACCOUNT UPON (A) ANY FAILURE OF THE UNDERSIGNED TO
         PERFORM  OR  SATISFY  ANY TERM OR CONDITION HEREOF, (B) ANY DEFAULT BY
         THE  UNDERSIGNED  IN  THE  PERFORMANCE  OF  ANY  OBLIGATION  OF  THE
         UNDERSIGNED TO THE BANK WHETHER CONTAINED HEREIN OR OTHERWISE, (C) THE
         DEATH  OF  ANY  GUARANTOR  OF  ANY  INDEBTEDNESS OF THE UNDERSIGNED OR
         RECEIPT  BY  THE BANK OF NOTICE OF TERMINATION OF ANY GUARANTEE OF ANY
         INDEBTEDNESS  OF  THE UNDERSIGNED OR (D) ANY DEMAND FOR PAYMENT OF THE
         LOAN,  WHETHER OR NOT ANY TIME PERIOD HAS LAPSED AFTER THE TIME OF THE
         DEMAND.



7.     DOCUMENTATION

7.01     The  undersigned  shall deliver to the Bank from time to time, promptly
         on  request,  in  form  and  substance  satisfactory  to  the  Bank:

        (a)     any  security  required  by  the  Bank;  and

        (b)     all other documents and information required by the Bank
                including, if  applicable,  all  documentation  and  information
                listed  in  the Addendum.

7.02     Any  security  document delivered hereunder shall be held as additional
         security for the indebtedness of the undersigned for the Loan, and not
         in  substitution  or  in  satisfaction  thereof.

7.03     The Bank's statements of the Account at any time shall constitute prima
         facie  evidence  of  the  Loan.

7.04     The  undersigned  will  immediately notify the Bank if any guarantor of
         the  indebtedness  of  the  undersigned  to  the  Bank  dies.


8.     COSTS

8.01     The  undersigned  shall  pay all reasonable costs, charges and expenses
         incurred  by  the  Bank  in  the  preparation  or  enforcement of this
         Agreement  or  any  security  required  hereunder.


9.     NOTICES

9.01     The  Bank shall not be required to notify the undersigned of changes to
         either the Prime Rate or the U.S. Base Rate, and shall not be required
         to  notify  the undersigned of changes to the Overdraft Rate or in the
         Bank's  calculations  of  the  Lending  Margin  Calculation,  if  any.


9.02     Any  request  for  any  document or information, notice of termination,
         demand  for  payment  or  other  notice  to be sent by the Bank to the
         undersigned  in  connection  with this Agreement or the Account may be
         delivered  to  the undersigned (or any one of them, if more than one),
         or  mailed  by prepaid ordinary mail to the undersigned (or any one of
         them,  if more than one) at the last known address for the undersigned
         (or  any one of them, if more than one) in the Bank's records, and the
         undersigned shall be deemed to have received such request or notice on
         the  date  of delivery, if delivered, and four (4) days after mailing,
         if  mailed.



10.     GENERAL

10.01    The  provisions  of  the  Addendum, if any, shall be incorporated into
         this  Agreement  and  form  part  hereof.

10.02    This  Agreement  shall  be  binding  upon  the  undersigned  and  the
         respective  executors,  administrators,  successors and assigns of the
         undersigned, but the undersigned shall not assign any of the rights or
         obligations  of  the  undersigned  hereunder without the prior written
         consent  of  the  Bank.

10.03    The  failure  of  either  the  undersigned  or  the  Bank  to  require
         performance  by  the  other  of  any  provision hereof shall in no way
         affect  the  right thereafter to enforce such provision; nor shall the
         waiver  by  either  party  of any breach of any covenant, condition or
         proviso  of this Agreement or any other agreement between the Bank and
         the  undersigned be taken or held to be a waiver of any further breach
         of  the  same  covenant,  condition  or  proviso.

10.04     This Agreement shall be in addition to and not in substitution for any
          other  agreement  between  the  undersigned  and  the  Bank.

10.05     The  undersigned will execute, and agrees to be bound by the terms and
          conditions  contained  in,  the  Bank's  standard form of Operation of
          Account  Agreement  or  appropriate form of current account authority.
          Without  limiting  the  generality  of  the foregoing, the undersigned
          agrees  that  any statement of the Account provided to the undersigned
          shall  be deemed to be a correct and accurate statement of the Loan as
          at  the date of the statement, unless the undersigned has notified the
          Bank  of  errors,  irregularities  or  omissions within the thirty day
          period  specified  in  the  Operation  of Account Agreement or current
          account  authority.



10.06     All  payments relating to the Loan made by the undersigned pursuant to
          this  Agreement  shall  be  paid  in the currency in which the Loan is
          outstanding.  All  other  amounts  owing  hereunder  shall  be paid in
          Canadian  dollars  except  as  otherwise  herein  agreed.

     In  the event the Bank is required to recover any amount owing hereunder by
way  of  judicial  proceeding,  all  amounts owing hereunder shall be payable in
Canadian  dollars.  Notwithstanding  the  foregoing,  the  obligation  of  the
undersigned  under  this Agreement to make payments in U.S. dollars shall not be
discharged  or  satisfied  by  any  tender  or recovery pursuant to any judgment
expressed  in  or converted into Canadian dollars except to the extent that such
tender or recovery shall result in the effective receipt by the Bank of the full
amount of U.S. dollars so payable hereunder.  Accordingly, the obligation of the
undersigned shall be enforceable as an alternative or additional cause of action
for  the purpose of recovery in Canadian dollars of the amount (if any) by which
such  effective  receipt  shall fall short of the full amount of U.S. dollars so
payable  hereunder  and shall not be affected by any judgment being obtained for
any  other  sums  due  hereunder.

     For  purposes of recovery by the Bank of amounts debited to the U.S. Dollar
Account,  the  Canadian  Dollar Equivalent Amount shall apply.  "Canadian Dollar
                                                                 ---------------
Equivalent  Amount" shall mean, on any date, the amount of Canadian dollars into
------------------
which  U.S.  dollars  may be converted at the Bank's applicable noon spot buying
rate  on  the  date  such  conversion  is  made.

10.07     Time  shall  be  of  the  essence  of  this  Agreement.

10.08     If  more  than one person signs this Agreement, the obligations of the
          undersigned are joint and several and the Bank is authorized to honour
          any cheque drawn on the Account or pay any withdrawal from the Account
          to  create  or  increase  the  Loan  if  any such cheque or withdrawal
          request  is  signed  by  one  of  the  undersigned.

10.09     It  is  the  express  wish  of the parties that this Agreement and any
          related  documents  be  drawn  up and executed in English. Les parties
          conviennent  que  la  pr  sente  convention  et tous les documents s'y
          rattachant  soient  r  dig  s  et  sign  s  en  anglais.


As  at  April  30,  2004.

                                  Customer:  ID  Security  Systems  Canada  Inc.
                                  ----------------------------------------------

                                  By:       /s/  Peter  L.  Murdoch
                                            President


(To  be  signed by Account Holder(s), or by authorized signing officer(s) in the
case of corporations, societies, lodges, etc.  In the case of corporations affix
seal  where  applicable.)

<PAGE>
































                                   ADDENDUM TO
                            OPERATING LOAN AGREEMENT

LENDING  MARGIN  CALCULATION

     The  following  Lending  Margin  Calculation  is applicable to the attached
Operating  Loan Agreement.  The calculation and the amount of the Lending Margin
Calculation  is in the sole and complete discretion of the Bank, and in cases of
dispute,  the  Lending  Margin Calculation calculated by the Bank shall prevail.

     The  Lending  Margin  Calculation  shall  be  an  amount  equal  to:

If  not  applicable,  insert  N/A

Operating  Advances  are  at  all times to be contained within 75% of the Bank's
estimated worth of good quality assigned Canadian domiciled accounts receivable,
plus,  60% of the Bank's estimated worth of good quality assigned U.S. domiciled
accounts  receivable after deducting accounts past due 60 days and over, foreign
accounts,  inter-company  accounts,  deemed trusts arising from unpaid taxes and
government  remittances,  contra  accounts,  accounts  in dispute, and any other
unacceptable  accounts.

Plus  50%  of  the  Account  Manager's  valuation  of  assigned raw material and
finished goods inventory located in Ontario which is free of encumbrances, after
deducting  work-in-process, on consignment and prior claims. The margin value of
inventory  is  not  to  exceed  one  third (1/3) of the margin value assigned to
accounts  receivable.







IF NOT APPLICABLE, INSERT N/A


     Documentation:

     The  Borrower  shall  deliver  to  the  Bank  the  following:

1.   Certified  aged  accounts  receivable  and accounts payable listing for the
     Borrower,  and  guarantors  as  appropriate,  illustrating  rebates,
     discounts, allowance for returns, allowance for doubtful accounts, contra
     accounts, set-off amounts  due  from  related parties to be submitted
     within 25 days of month end;

2.   Certified  listing  of  inventory to be submitted within 25 days of month
     end;

3.   Quarterly  in-house  combined  financial  statements  for the ID Security
     Systems  Group to be  provided  within  45  days  of each fiscal quarter
     end;

4.   Annual audited combined year end financial statements for the ID Security
     Systems  Group  within  120  days  of  fiscal  year  end;

5.   Annual  un-combined audited year end financial statements for ID Security
     Systems  Canada  Inc., ID Systems USA Inc., Custom Security Industries
     Inc., and ID Systems Do Brazil within  120  days  of  fiscal  year  end;

6.   Annual  combined  financial projections for the ID Security Systems Group
     including balance sheet, income  statement,  and  cash  flow statements
     to be submitted  within  120  days  of  fiscal  year  end.























<PAGE>



SECTION  302  CERTIFICATION:


Exhibit  31.1

                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification  of  CEO

I,  Peter  L.  Murdoch,  certify  that

1.   I  have  reviewed this quarterly report on Form 10-QSB of Sentry Technology
Corporation;

2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e)) for the registrant and we have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c)     disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.  The registrant's other certifying officer and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
function):

a)     all  significant  deficiencies  and  material weaknesses in the design or
operation  of  internal  controls  over financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees  who  have  a  significant role in the  registrant's internal controls
over  financial  reporting.


                              /s/  PETER  L.  MURDOCH
                          ---------------------------------------------
                              Peter  L.  Murdoch
                              President  and  Chief  Executive  Officer

August  16,  2004












<PAGE>





SECTION  302  CERTIFICATION:


Exhibit  31.2

                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification  of  CFO

I,  Peter  J.  Mundy,  certify  that

1.   I  have  reviewed this quarterly report on Form 10-QSB of Sentry Technology
Corporation;

2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e)) for the registrant and we have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c)     disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.  The registrant's other certifying officer and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
function):

a)     all  significant  deficiencies  and  material weaknesses in the design or
operation  of  internal  controls  over financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees  who  have  a  significant role in the  registrant's internal controls
over  financial  reporting.


                              /s/  PETER  J.  MUNDY
                          -------------------------------------------------

                              Peter  J.  Mundy
                              Vice  President  and  Chief  Financial  Officer

August  16,  2004













<PAGE>


SECTION  906  CERTIFICATION:


Exhibit  32.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                               ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Certification  of  CEO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on  Form 10-QSB for the period ended June 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the Report"), I, Peter L.
Murdoch, Chief Executive Officer of the Company, certify, pursuant to Section 18
U.S.C.  1350,  as  adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.



                               /s/  PETER  L.  MURDOCH
                          -------------------------------------------------

                               Peter  L.  Murdoch
                               President  and  Chief  Executive  Officer

                               August  16,  2004


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.
























<PAGE>









SECTION  906  CERTIFICATION:


Exhibit  32.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                               ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Certification  of  CFO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on  Form 10-QSB for the period ended June 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the Report"), I, Peter J.
Mundy,  Chief  Financial Officer of the Company, certify, pursuant to Section 18
U.S.C.  1350,  as  adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of
2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.



                              /s/  PETER  J.  MUNDY
                          -------------------------------------------------

                              Peter  J.  Mundy
                              Vice  President  and  Chief  Financial  Officer

                              August  16,  2004


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.